FTX Contagion Spreading Wide

Liquid Global – a Japanese crypto platform owned by FTX – halted withdrawals shortly after its parent company filed for bankruptcy. The former became a victim of hackers last year and lost over $90 million worth of digital currencies. Back then, FTX secured a $120 million debt financing so Liquid Global could resume its services.

Crypto lending platform Genesis Global Capital also paused withdrawals, explaining that a vast number of customers started taking their assets out of the entity. The “abnormal request” indicated that customers feared their investment could suffer if it stayed in the hands of a centralized organization.

Multicoin Capital – a cryptocurrency venture firm – was also affected. Managing partners Kyle Samani and Tushar Jain admitted that they stored “too many assets on FTX,” putting too much trust in their relationship. The company raised hopes it could retrieve some of its distribution but realized this could be a challenging task since most of them are wrapped in bankruptcy proceedings.

BlockFi – a crypto lending platform coping with significant problems throughout 2022 – had to throw in the towel after the latest events. FTX previously provided a $400 million loan to the firm and offered to acquire it for $240 million. Following the latest events, BlockFi was unsuccessful into resuming its regular course of business and filed for bankruptcy as well. 

The List Goes On

The Singaporean state holding company owned by the local government – Temasek – invested $210 million in FTX International and $65 million in FTX US. It informed that the investment has virtually shrunk to zero following the exchange’s decay.

Hedge fund Galois Capital revealed half of its capital was trapped in the troubled exchange. Sources estimate that this amount could be approximately $100 million. 

Paradigm – a crypto and Web3-focused venture capital firm – was also “shocked” by the crash. Some reports hinted that it had invested over $270 million in FTX.

Europe’s largest digital asset investment and trading group – CoinShares – disclosed that over $30 million, or about 11% of its total net asset value, was stuck on FTX. Mike Novogratz’s crypto financial services firm – Galaxy Digital – held more than $76 million worth of exposure to the distressed entity.

The world’s largest asset manager – BlackRock – is also on the list. CEO Larry Fink revealed his company invested $24 million in FTX prior to the latter’s catastrophe. 

Tiger Global Management – the hedge fund headed by billionaire Chase Coleman – has participated numerous times in FTX’s fundraisers. While the exact amount of losses remains unknown, one could guess Tiger Global has taken a major punch due to the collapse.

Crypto platform Aurus Global faced a “short-term liquidity issue” earlier this week. Its institutional credit underwriter – M11 Credit – assured that both parties had joined forces to limit the risks for customers.